Good business practices for the photovoltaic market

In the last two years, the photovoltaic market has become one of the most attractive for those who want to start a business in Brazil. Participants in the sector have already surpassed the significant mark of 20 thousand companies, including integrators, installers, designers and distributors.

This is because last year, with the Covid-19 pandemic, the photovoltaic sector, despite growing above the average for other areas, still had dampened demand, which will only be met now in 2021.

Read too: The number of companies dedicated exclusively to solar energy is growing

With so many companies entering the sector, it is important to revisit some basic concepts, including what we call the “photovoltaic corridor”. The corridor is the path that all companies in the sector will follow over time, facing all the mandatory challenges (and also unforeseen ones) imposed for the maturation of the business and, consequently, for its survival. Is your company prepared to move through the photovoltaic corridor?

Over the years that I have worked in the photovoltaic market, I have noticed some characteristics and practices common to companies that have become a reference. That's what I share below.

A short, medium and long-term business vision so that the photovoltaic market is highly qualified and its participants can make the most of the irreversible growth movement of distributed photovoltaic generation in the country.

1) Have a good business plan

The foundation of everything starts with a good business plan. Having a plan about what you intend to do, how much it will cost, what the return expectations are and the deadlines your company has to perform are mandatory to see a long life in the sector (and in any other).

The good news is, if you don't have a business plan or believe yours isn't good enough, you can take care of it now! Creating a good path for your company is infinitely better than remaining adrift. Don't compromise with mistakes.

2) Prefer being a sniper to a sniper

Define a segmentation to act on and focus on these businesses. When you decide to shoot everywhere and waste ammunition, it costs a lot. Are you going to be an integrator? Define a segmentation, such as residential, for example, and focus on projects with this characteristic. Are you going to be a designer?

Keep in mind projects with characteristics that are within your know-how and act around them. The important thing is to have security in your business plan to be able to close opportunities that allow you adequate remuneration and quality growth.

Creating an excellent portfolio of completed projects/installations that do not present any flaws is worth its weight in gold. This will be a deciding factor for your client when they compare your company with competitors.

3) Don't participate in price wars

When the customer wants to squeeze for the lowest price because of the competition and this goes beyond the health of your sale, this is the time to decline the proposal. You may ask, “So I shouldn’t be competitive and sell a lot?” Yes, it should, but as long as it helps you stay on the market and not the other way around.

Will your sale create minimal financial reserves in case you need to perform any maintenance on the customer or if something goes wrong during the sale itself? If the answer is no and you still sell this way, your company will fail!

Statistically, for every 500 new entrants into the photovoltaic market, another 350 companies cease to exist. The main reason for failure is the lack of financial capacity.

This happens, in most cases, because the margin on sales made did not allow these entrepreneurs to reinvest in their companies and, when demanded by liabilities from their facilities, the cost of rework triggered financial disruption.

Lack of a healthy margin in sales generates a lack of investment, which prevents the increase in the number of professionals, causes a lack of qualifications to compete in the market and, consequently, results in the company going bankrupt.

4) Always have quality as your first option

This is the part that should be the simplest, but unfortunately it isn't. Before continuing, a parallel to illustrate the simplicity of what we are going to talk about: what are the product/service references for a smartphone? Or for cars, televisions?

Without knowing the answers, I believe most people thought of companies/brands that are not the cheapest on the market. This is because there is recognition of the added value of their solutions. In the photovoltaic market, the logic should be the same.

Companies that think like this will create an absurd competitive advantage at this time of market maturation. Quality in services and products must be a basic premise for any company that wants to prosper in its segment.

Imagine if your goals were to become a reference in the market. Selling at the lowest price can be a strategy, but it is certainly not the best if you aim for the long term.

5) Relationship and business

Have the best business partners. No one grows alone. This applies to life as well as business, especially in the photovoltaic sector. Seek the best partnerships and establish the best relationships throughout the market chain.

Working with the best distributor(s) generates competitiveness. Creating partnerships with other market agents (even competitors) also generates competitiveness. Search for the best service providers and so on.

A company with an excellent network of relationships generates synergy, which allows support in times of need. It is necessary to learn from the best market practices (benchmarking), increase its performance capacity and improve its financial performance.

6) Know how to sell

There are many ways to make a sale and the best one is the one that costs the least. Good knowledge of the stages of a sales funnel can save your company a lot of time and money. I don't mean to say that companies don't know how to sell, but it's important to always improve the process.

Selling is an art and as such it must be practiced, renewed and improved every day. A sale that took a month to happen cost more than the same sale made in just two weeks, because during that period you used less of your team's time, made fewer visits and were much more assertive in bringing the order home.

A good customer qualification process is essential for increasing conversion rates and reducing CAC (Customer Acquisition Cost). When you sell a solution that will last 25 years (much longer than 25 years, in fact), it is extremely important to understand what your customer needs and meet their needs.

Satisfied customers become spontaneous sellers of your brand. Selling the most expensive solution costs less! Yes, that's right. Value-added sales that generate greater cost-benefit make everyone more satisfied, the process is less costly and allows your company to have more predictability in its financial statement.

This results in better performance and, consequently, longer life on the market. There are countless other factors that will influence the ability of companies to remain and prosper in the Brazilian photovoltaic market, but, certainly, by following the six points discussed here your expectation of success will increase considerably.